Sharechat Logo

NZ dollar benefits from dovish Federal Reserve

Thursday 21st March 2019

Text too small?

The New Zealand dollar rose after the US Federal Reserve signalled only one further rate hike in 2020. 

The kiwi was trading at 69.11 US cents at 8am in Wellington versus 68.33 US cents at 5pm in Wellington. The trade-weighted index was at 74.57 from 74.07. 

The Fed held interest rates steady at 2.25- 2.50 percent. Its "dot plot," which charts estimates for where voting committee members think the benchmark rate should be over the next three years, now points to only one rate hike in 2020. It had previously pointed to two hikes in 2019 and another in 2020. 

It also downgraded the growth and inflation outlook and "provided guidance on ending balance sheet normalisation, with asset runoffs to conclude by the end of September," said ANZ economists Michael Callaghan and Miles Workman. 

"After holding in a tight range in the lead up to the FOMC this morning, the dovish read from the Fed sent this cross sharply higher through resistance," they said, referring to the NZD/USD cross. 

The focus will now shift to New Zealand's fourth-quarter economic growth data, due at 10:45 am. Economists are tipping the economy to have grown 0.6 percent on the quarter and "today's GDP figures will set the tone for next week's RBNZ official cash rate review," they said.  

The New Zealand dollar was trading at 96.74 Australian cents from 96.57, at 52.18 British pence from 51.54, at 60.37 euro cents from 60.20, at 76.45 yen from 76.24 and at 4.6246 Chinese yuan from 4.5865.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZX50 tops 10,000, growing 284% in past decade
NZ dollar little changed ahead of Australian CPI data
NZX50 cracks 10,000 level as weak kiwi boosts A2, F&P Healthcare
Zespri signals upside for grower payments in 2020
Bathurst maintains guidance despite reduced Stockton output
ComCom conditionally approves Knauf-USG merger
23rd April 2019 Morning Report
NZD below 67 US cents after US data lifts greenback
MARKET CLOSE: NZX50 gains 1.8% this week, buoyed by rate outlook
NZ dollar falls against Aussie after strong Oz jobs data

IRG See IRG research reports